Challenges in Europe await Merkel

Once Angela Merkel has savoured her third and biggest general election victory, the small issue of Europe awaits.

The poll result leaves the conservative German chancellor triumphant but still needing a coalition partner from among her centre-left rivals.

The way forward for the European Union raises even trickier challenges.

From the likelihood of more debt relief for Greece, to more aid for Portugal, Spain’s dangerously shaky economy, Italy’s political instability and France’s resistance to far-reaching reforms, the landscape is dotted with pitfalls.

Wish List

France’s industry minister, Arnaud Montebourg, a frequent critic of Merkel, wasted no time in laying out southern Europe’s wish list and calling on the chancellor to step forward.

“Our common duty is to push Europe in a new direction, to ensure that this region —which is the only region in the world in recession — becomes a growth area once again,” he told France’s Itele news.

Clarity

Europe’s leaders are looking to Merkel for clarity on plans to establish a single framework for all the bloc’s banks, and what steps she is willing to take to strengthen monetary union.

Both steps potentially require German taxpayers to take on more liability for other euro zone countries’ debts and banks — moves regarded with deep suspicion in Germany.

The signs are that Germany is ready to push ahead with a less comprehensive form of banking union than proposed by the executive European Commission, avoiding changing the EU’s treaty while keeping its own politically sensitive savings banks under national supervision.